Common Agricultural Policy
System of financial support for farmers in European Union (EU) countries, a central aspect of which is the guarantee of minimum prices for part of what they produce. The objectives of the CAP were outlined in the Treaties of Rome (1957): to increase agricultural productivity, to provide a fair standard of living for farmers and their employees, to stabilize markets, and to assure the availability of supply at a price that was reasonable to the consumer. The CAP has been criticized for its role in creating overproduction, and consequent environmental damage, and for the high price of food subsidies.
History
The policy, applied to most types of agricultural product, was evolved and introduced between 1962 and 1967, but was later amended to take account of changing conditions and the entry of additional member states. At the heart of the CAP is a price support system based on setting a target price for a commodity, imposing a levy on cheaper imports, and intervening to buy produce at a predetermined level to maintain the stability of the internal market. When the CAP was devised, the six member states were net importers of most essential agricultural products, and the intervention mechanism was aimed at smoothing out occasional surpluses caused by an unusually productive season. However, the CAP became extremely expensive in the 1970s and 1980s due to overproduction of those agricultural products that were subsidized. In many years, far more was produced than could be sold and it had to be stored, creating ‘mountains’ and ‘lakes’ of produce. This put the CAP under intense financial and political strain, and led to reforms in the 1990s that substantially replaced guaranteed prices with compensation to farmers if prices fell. The CAP remains one of the most important EU policies, with agricultural expenditure accounting for half of the 90 billion euros allocated towards the annual budget of the European Community in 2002.
Reforms In response to the alarming rate at which surpluses were increasing, a package of reforms was initiated 1992 to cut prices and compensate farmers for the loss of income through direct subsidies. Cereal farmers who took land out of production received ‘set-aside’ payments. The reforms helped to cut food mountains to manageable levels and restrained expansion of CAP spending, at times over 70% of the EU budget. More radical changes, involving staged substantial cuts in cereal, dairy, and beef support prices, were detailed in the Agenda 2000 agreement of March 1999 for the period 2000–06. These changes are intended to bring market forces to bear on EU agriculture and make farmers more responsive to consumer wishes. The most recent CAP reform in the UK took place in June 2003 when subsidies were decoupled from production, thus allowing farmers to focus their production on market demands and not bias them towards those crops with the highest subsidy. |
Other agricultural matters Agriculture ministers agreed in June 1999 to end all battery egg production across the EU from 2012, marking the culmination of a 30-year campaign by welfare activists against the widespread use of cramped hen cages. The creation of a new European Food Authority was proposed by the European Commission in January 2000. With the aim of ensuring a high level of food safety, it is envisaged that the new authority will be established by 2002. Also in January 2000, the Commission began legal action against France in the European Court of Justice with regard to the continuing French ban on British beef. A widespread European ban had been imposed due to fears |
| relating to the safety of British beef following the discovery of cases of bovine spongiform encephalopathy (BSE), or mad cow disease, in British cattle. Fears over BSE grew in late 2000 after cases were discovered in France, Germany, and Spain. In December, EU agricultural ministers agreed a total ban, coming into effect on 1 January 2001, on feeding meat-and-bone meal to all animals, including pigs and poultry, and a ban on all cattle over 30 months old from the food chain unless first tested for BSE. |
